Oil prices up in Asian trade, buying restrained
Oil prices rose in Asia Friday, recovering from a steep dive but buying sentiment remains shackled by a global supply glut, analysts said.
U.S. benchmark West Texas Intermediate reversed an earlier decline to advance two cents to US$50.81 and Brent gained 20 cents to US$56.85 in afternoon trade.
A rise in German industrial production numbers and signs of a potential demand pick-up are providing some support, while top oil producer Saudi Arabia has raised pricing for its crude shipments to Asia, the kingdom’s biggest market, in a sign of increased demand.
However, a global supply glut remains a dampener for any rally.
WTI and Brent sank 3.6 percent on Wednesday after the U.S. Department of Energy said commercial inventories in the world’s biggest economy rose nearly 11 million barrels to a fresh record of 482.4 million in the week ending April 3.
That came after Saudi Arabia’s Oil Minister Ali al-Naimi said the country’s production hit an all-time high of 10.3 million barrels a day in March.
The figure was up 450,000 from February and topped the previous peak set in 1980, and Naimi said he expected output to continue at around 10 million a day.
Alastair Newton, an analyst with Nomura Securities, said the downward pressure on prices will likely persist at least for the rest of this year.
“Saudi Arabia’s determination to protect its market share, the key driver, shows no sign of easing despite the fiscal consequences for the kingdom,” he said in a report on Thursday.